CFTC Also Charges Concord Energy LLC, Founded by the Former Enserco
Traders

WASHINGTON, D.C. - The United States Commodity Futures Trading Commission
announced today the filing of five federal civil injunctive actions against a total of
15 individuals, alleging false reporting and attempted manipulation in violation of
the Commodity Exchange Act (CEA). All the individual defendants are or were
natural gas traders working for various energy companies. Also charged was
Concord Energy, LLC, a company founded by former traders from Enserco Energy,
Inc. Two of the cases were filed in the same federal court in Texas, and the
other three were filed in federal courts in Georgia, Colorado and Oklahoma. The
traders are charged with submitting reports to various natural gas price compilers,
including Gas Daily, Inside FERC (IFERC), Natural Gas
Intelligence (NGI), Btu Daily and Natural Gas Week, that contained false
information such as fictitious trades or the alteration of price or volume for actual
executed trades, all in an attempt to manipulate prices.

CFTC v. Whitney

The first action, filed in the U. S. District Court for the Southern District of
Texas, charges that Michael Whitney, formerly an energy trader with Duke Energy
Trading and Marketing, LLC (DETM), submitted or caused to be submitted false or
misleading or knowingly inaccurate price and volume information to Gas Daily
and Enerdata, Ltd. concerning natural gas transactions he executed on behalf of DETM
between June 2001 and approximately August 2002. As alleged, Whitney submitted
the false trade information in an attempt to manipulate the price of natural gas in
interstate commerce. In one incident alleged in the complaint, Whitney and a
trader from DETM’s Calgary office submitted price and volume information for the
same transaction to Enderdata with the Calgary trader submitting accurate information
and Whitney submitting false information.

CFTC v. Bradley and Martin

The second action, filed in the U. S. District Court for the Northern District of
Oklahoma, charges that between January 2001 and October 2002, Jeffrey A. Bradley,
formerly the manager of marketing for CMS Field Services, Inc., knowingly submitted
false, misleading or knowingly inaccurate transaction information regarding hundreds
of natural gas transactions to multiple natural gas reporting firms, including but not
limited to Gas Daily, Btu Daily, NGI and Natural Gas Week,
by reporting fictitious trades as if they were bona fide transactions, by
altering the prices and volumes for actual trades, or by reporting non-fixed price
trades as if they were fixed price trades. As alleged, on at least one occasion,
Robert L. Martin, formerly the director of gas supply for the same company, conspired
and coordinated with Bradley, and caused reports to be submitted to the same natural
gas reporting firms. According to the complaint, one telephone conversation
between the two openly discussed a plan to “make up some numbers and turn them
in [to the reporting firms].”

CFTC v. Atha, McDonald and Whalen

The third case charges Georgia residents Paul Atha and Christopher McDonald and Texas
resident Michael Whalen, all formerly Mirant Americas Energy Marketing, L.P. energy
traders, with false reporting and attempted manipulation of the natural gas markets
between January 2000 and late 2000 or early 2001. As charged, Whalen departed
Mirant in May 2000 and his alleged violations occurred during his subsequent
employment with Cinergy Corporation in Texas. The complaint alleges a series of
revealing telephone calls between the Mirant traders and Whalen wherein they conspire
about how they should report to IFERC to benefit their positions and discuss how to
make their reports believable. For instance, as alleged, Whalen says to
McDonald, “hey, do you want to fax me ... exactly what you guys are going to
write down so its more believable...I’ll just write the exact
opposite.” The action was filed in the U.S. District Court for the
Northern District of Georgia.

CFTC v.Johnson, Moore, Tracy, Harp, Dizona and Dyer

The fourth case, filed in the U.S. District Court for the Southern District of Texas,
charges Denette Johnson, Courtney Cubbison Moore, Robert Harp and Anthony Dizona of
Texas and John Tracy and Kelly Dyer of California with knowingly delivering dozens of
reports containing knowingly inaccurate fixed-price, physical, baseload trade
information for at least nine locations in the Western United States between October
2001 and June 2002. The complaint also alleges that defendants attempted to
manipulate the price of natural gas in interstate commerce by reporting biased
information to price reporting companies. Specifically, the complaint alleges
that defendants regularly circulated an e-mail with directions to the traders to
report prices in such a way that it would benefit their positions. The complaint
charges that all these activities occurred while defendants were employed by energy
company Shell Trading Gas and Power Company in providing services for Coral Energy
Resources, L.P.

CFTC v. Reed, Danyluk, McLaughlin and Concord Energy, LLC

The final case charges that between May 2000 and October 2002, Matthew Reed, Darrell
Danyluk and Shawn McLaughlin engaged in false reporting and attempted manipulation
while employed by Enserco Energy Services. McLaughlin engaged in this conduct
while acting asPresident of Enserco. The complaint further alleges that
Reed continued the false reporting and attempted manipulation scheme while employed by
Concord Energy LLC, which is also charged with liability for his acts. As
alleged, while at Enserco, with McLaughlin’s knowledge and consent, Reed,
located in Enserco’s Colorado office, and Danyluk, located in Enserco’s
Calgary office, coordinated on an almost daily basis how they wanted to report
fictitious trades to numerous reporting firms, including Gas Daily, and
Natural Gas Intelligence, to benefit trading positions they held.
According to the complaint, Reed and Danyluk called this their
“double-dipping” scheme and perpetrated their scheme on reporting firms by
portraying the Colorado and Calgary offices as separate trading operations when they
were not.As President of Enserco, McLaughlin also is charged with
controlling person liability for the acts of Reed and Danyluk. The action was
filed in the United States District Court for the District of Colorado.

The CFTC thanks the President’s Corporate Fraud Task Force and the National
Futures Association for their assistance in these cases.